The state of TV advertising: the advertiser’s perspective

I spend a lot of time talking about adtech in video streaming, a world which can often become an echochamber of product enhancements with little regard for what brands actually want. So it was great to attend Campaign UK 's TV Advertising Summit and hear directly from the source of CTV ad revenues. The conversations that took place captured the power of TV and its potential to deliver success in the digital realm, as captured by this quote from one of the UK’s biggest retailers:

“TV has been fundamental in building the John Lewis brand over the last 15 years and is a safe and reliable investment for us. But safe won’t necessarily get us growth so we are excited about the evolution of the market and the new opportunities that TV brings for us to access relevant audiences and remain relevant and successful in 2024.” Rosie Hanley, Marketing Director, John Lewis

While TV has a long history of delivering engaged audiences, it is an industry undergoing huge change. Such change brings some trepidation, but among brands it is clear there is a lot of optimism for the future.

Here are my top 3 takeaways from the event:

1) A flourishing relationship: retail and TV

“Retail is a dominant vertical year-round, but particularly in the second half of the year thanks to the holiday season ad blitz. Six of the top 10 retail advertisers served more impressions year-over-year.” The State of Viewership, Samba TV report

Retail ad spend on TV is increasing, and it’s important to note that brands do not spread their spend equally across the year. There is, of course, a season that matters most as consumer spend ramps up towards Christmas. There is also a time of day.

“Retailers are putting more emphasis on the primetime daypart, with about one-third of total retail impressions served during that airtime, up 4% year-over-year.”

The ability to scale advanced advertising operations within specific time constraints is set to become more important than ever.

2) Water-cooler moments are harder to come by

Brands are finding it increasingly hard to capture the public’s imagination and create discussion around their campaigns.

“TV gives us those water cooler moments… no cab driver ever asked me about a banner ad.” Ian Maybank, Head of Media and Connections, Specsavers

An obvious example of collective attention in TV is around sports:

“Sports is one of the few remaining water cooler moments so Euro2024 is very important for us.” Matt Bushby, Chief Marketing Officer, Rightmove

Water-cooler moments are not just limited to live events:

“Viewers don’t have to watch at the same time. Look at how people watched Mr Bates or Joe Exotic during Covid. VOD can provide a water cooler fortnight.” Harry Dromey, Marketing Director, Domino’s

Dromey ended with a positive message on the future of OTT advertising:?

“Currently there aren’t enough eyeballs on VOD. But this will change. We’d love to do more.”

3) Better measurement needed to compete with TikTok

It’s important that OTT providers improve their ad products in order to compete with other digital channels and increase the amount of ad budgets coming into the market.

“We currently measure minute-by-minute. We’re looking at going to second-to-second.” Justin Sampson, CEO, Barb Audiences

This approach was backed up by a leading UK high-street brand:?

“TikTok measures second by second so it’s logical to take that step.” Ollie Shaver, Omni-Media Director, Boots

There is a lot of discrepancy from one OTT provider’s ad offering to another, but consistency in measurement is key to increasing the size of the ad pie. The comment from Barb reminded me of the figures that came out of Peacock recently, when it announced the “biggest live-streamed event in US history” with 16.5 million concurrent devices.?

But it seems that Peacock’s definition of concurrency covered a much longer window than minute-by-minute. Providers need to discuss concurrency in terms that brands recognise and offer the kind of measurement that brands have come to expect in the digital domain.

Conclusion: scale and meaningful measurement matters

There’s a perception that scale for linear streaming is primarily a matter for sports and news events, but it’s a growing issue for day-to-day AVOD viewing, too, not to mention the proliferation of Free Ad-Supported TV (FAST) viewing.?

Advertisers follow eyeballs and audiences for streaming services are set to increase massively as we move towards an all-streaming future.

To convert such growth into advertising revenues, streaming providers must offer better ad products. That translates into better addressability and better measurement that actually helps brands run better campaigns. And doing it at scale.

Let me know if you’d like to chat about any of the above - I’m always interested in discussing the future of TV and adtech. You can reach me at [email protected].